Paradigm Co-Founder Plans $1 Billion Raise for Two New Crypto Venture Funds

The co-founder of Paradigm, Matt Huang, is reportedly gearing up to raise as much as $1 billion for two new venture capital funds aimed at backing early-stage and growth-stage crypto startups. 

This fundraising effort would mark one of the largest capital raises in the digital asset industry since the 2022 market downturn, further suggesting that investor sentiment may shift as the crypto market shows signs of sustained recovery.

According to a Bloomberg report, Huang’s fundraising strategy will involve launching two separate funds: a $500 million venture fund and a $500 million seed fund. These funds will reportedly target startups developing blockchain infrastructure, decentralized finance (DeFi), and other Web3 technologies.

If successful, this would represent the largest fundraising effort by a crypto-native venture firm since the collapse of FTX in late 2022. The FTX debacle had a chilling effect on venture activity in the space, prompting many institutional investors to take a cautious stance. Huang himself faced scrutiny due to Paradigm’s prior investment in FTX, and he later admitted that the firm had “deep regrets” about the bet.

A Renewed Venture Push

Paradigm, founded in 2018 by Matt Huang and Coinbase co-founder Fred Ehrsam, rapidly became a prominent player in the crypto VC landscape. The firm raised $2.5 billion for its flagship fund in 2021, at the peak of the last bull cycle. That fund backed several high-profile projects, including Uniswap, Optimism, and Compound.

Although Ehrsam stepped down from his role in 2023, Huang has continued to steer Paradigm through the bear market, gradually repositioning the firm for a new growth phase. The planned $1 billion raise would boost Paradigm’s capital under management and help it regain leadership in a space increasingly crowded with both traditional VCs and new entrants.

This renewed interest comes as crypto markets experience a resurgence, fueled by factors such as approving spot Bitcoin ETFs in the United States, increasing institutional adoption, and a wave of innovation in DeFi and Ethereum scaling solutions. As of March 2025, Bitcoin is hovering near $85,000, close to its all-time high, while Ethereum and other altcoins have also posted significant gains.

VC Activity Picking Up Steam

The potential size of the raise is also significant when compared to recent moves by other venture firms. In 2023, Andreessen Horowitz (a16z) launched a $4.5 billion crypto fund, but many of its recent investments have been more cautious and focused on infrastructure plays. Meanwhile, firms like Pantera Capital and Electric Capital have also resumed capital deployment, though at more modest levels.

Industry observers see Huang’s fundraising push as a positive indicator. “A billion-dollar raise in this environment signals strong conviction — not only from the fund manager but also from LPs,” said Nic Carter, a partner at Castle Island Ventures.

While the final outcome of the raise remains to be seen, the effort itself reflects growing optimism about the sector’s long-term prospects, especially as regulatory clarity improves in jurisdictions like the U.S. and Europe. Recent developments, such as the European Union’s MiCA regulation and the SEC’s more defined stance on crypto ETFs, are helping rebuild institutional confidence.

Looking Ahead

As Huang courts limited partners for the new funds, the crypto venture space may enter a new cycle of aggressive capital deployment. With more mature infrastructure and increasing mainstream interest, the conditions may be ripe for the next wave of blockchain innovation.

This could mean greater access to funding, mentorship, and strategic support for startups building in the space. For investors, it represents a calculated bet on crypto’s evolution beyond speculative assets into a foundational layer of the digital economy.